GM to build mid-sized vehicles for PSA image

US based automaker General Motors plans to build mid-sized vehicles for PSA Peugeot Citroen, while the Frech carmaker will assemble a compact model for GM’s Opel brand according to media reports on Thursday.

Under current plans, GM would build a replacement for the Citroen C5 mid-size sedan, the Paris-based company’s Rennes factory chief Jean-Luc Perrard told regional newspaper Ouest France.

On the same time, PSA Peugeot Citroen lans to assemble GM’s next Opel Zafira compact minivan, leading to hundreds of job cuts at the company’s development center in Ruesselsheim. If so this is big. Zafira is a very important model for Opel.

However, Opel denied that the alliance with Peugeot would prompt job cuts at the Opel development unit.

“No jobs will be lost in the Opel technical development center, however joint projects are divvied up,” Chief Executive Karl-Friedrich Stracke said in a statement.

“Work teams are in place, meeting regularly and hopefully soon we will be able to share the first update on alliance progress,” GM stated.

While GM may not be willing to release details, Peugeot Director General Frederic Saint-Geours said that the two automotive groups will “launch a raft of new models on shared platforms from 2016″.

Last week, General Motors (GM) said it made $8.3bn (£5.3bn) of profits globally in 2011 but that its European operations lost $700m (£447m) and current restructuring needs to go further.